Finding F2024-001 – Incorrect Application of Sliding Fee Discounts (Repeat Finding)
Assistance Listing Number: 93.224
Assistance Listing Program Title: Health Center Program Cluster
Federal Agency: U.S. Department of Health and Human Services (HHS)
Health Resources and Services Administration
Pass Through Entity: Not applicable
Federal Award Number: H80CS06647-18-02
H80CS06647-19-05
Federal Award Year: January 1, 2023 to December 31, 2023
January 1, 2024 to December 31, 2024
Compliance Requirement: Special Tests and Provisions – Sliding Fee Discounts
Criteria or Specific Requirements
Health centers must have a schedule of fees or payments for the provision of their health services consistent with locally prevailing rates or charges and designed to cover their reasonable costs of operation. They are also required to have a corresponding schedule of discounts applied and adjusted based on the patient’s ability to pay. The patient’s ability to pay is determined based on the official poverty guidelines, as revised annually by the U.S. Department of Health and Human Services (HHS).
The poverty guidelines are issued each year in the Federal Register and HHS maintains a web page that provides the poverty guidelines.
Non-grant funds (State, local, and other operational funding and fees, premiums, and third-party reimbursements which the project may reasonably be expected to receive, including any such funds in excess of those originally expected), shall be used as permitted under the law and may be used for such other purposes as are not specifically prohibited under the law if such use furthers the objectives of the project.
Condition
El Proyecto del Barrio, Inc. (El Proyecto) determines the amount of fees to be charged to a patient based on the patient’s income, expenses, and number of dependents in conjunction with the sliding fee schedule. Of the 40 patients selected for testwork, we noted the following:
• 8 patients were charged an incorrect sliding fee amount, which resulted in undercharging the patients by a total of $50. These errors were due to the incorrect patient income amount used to calculate the sliding fee amount. The patient’s net income or net pay was incorrectly used to determine the sliding fee amount instead of the patient’s gross income per the income tax return, pay stub, or earnings statement.
• 13 patients had no proof of income declaration or sliding fee application form on file. Therefore, there was no formal documentation to support the determination of the patient’s sliding fee amount. This resulted in undercharging the patients by a total of $1,615.
• 1 patient had no application form on file but had a record in the system. Using the patient’s supporting documentation on file and a family size of 1, we verified the patient’s sliding fee amount was correctly calculated.
• 1 patient’s income amount per the system was overstated by $11.50 as a result of an input error by staff. This error had no impact on the sliding fee calculation.
• 1 patient’s income amount per the system was overstated by $18.59, as the income amount per the patient’s application form did not agree with the patient’s supporting documentation on file (earnings statement). This error had no impact on the sliding fee calculation.
• 1 patient’s gross income amount was incorrect in the system. The gross income amount was incorrectly determined by staff based on one week's income instead of two weeks per the patient’s bi-weekly earnings statement. This error resulted in undercharging the patient by $70.
• 1 patient’s account number was incorrect in the system due to an input error by staff. This error had no impact on the sliding fee calculation.
Questioned Costs
The total gross amount undercharged was $1,735.
Cause
The causes of the above errors are the following:
• Errors by staff in properly determining the patient’s ability to pay.
• Incorrect patient income information input into the system
• Lack of supervisor review process and maintenance of income declaration forms.
• High turnover of clinical staff and lack of sufficient training.
Effect
Such errors may result in an incorrect determination of the patient’s ability to pay, incorrect fee amounts charged to patients, and noncompliance with federal grant requirements.
Recommendation
We recommend that El Proyecto’s controls and procedures be strengthened to ensure that income declaration is properly verified and adequately documented, and that the sliding fee discount is properly determined and applied. This should include incorporating additional procedures, as necessary, on the existing checklist used to determine the patient’s sliding fee amount, formal supervisory review of the checklist, and additional training for all staff involved in the sliding fee review process. This will help ensure that 1) there is proper monitoring and review of compliance with program requirements, and 2) proper determination of the sliding fee amount charged to patients.
Views of Responsible Officials and Planned Corrective Actions
El Proyecto del Barrio, Inc. acknowledges the finding related to the incorrect administration of sliding fee discounts. We are committed to strengthening the administration of the sliding fee program to ensure full compliance with grant requirements. To address these issues and prevent recurrence, the following corrective actions are being implemented:
1. Revised Application and Documentation Requirements:
o The Sliding Fee Program application forms are being updated to include structured sections for staff to record income from supporting documentation (e.g., pay stubs, tax returns), rather than relying on the patient to write their income on the application, which will greatly reduce incorrect income stated on support. Staff will be responsible for calculating annual gross income based on supporting documentation and have a checklist to ensure documentation is complete and retained/uploaded in the system.
2. Two-Step Review Process:
o A staff member (the “Preparer) will calculate the annual gross income, determine the household size, and determine the eligible sliding fee discount, and a second staff member (the “Reviewer”) will independently review and verify the Preparer’s calculations and determinations based on the supporting documentation. Both parties will document their review of the application to establish accountability.
3. Staff Training and Ongoing Competency Checks:
o Comprehensive refresher training will be provided to all staff involved in the sliding fee program process, including the use of the poverty guidelines, income calculation methods, the new forms, entering income and household size into the system, and uploading support to the system.
4. Formal Review:
o The Billing Department will conduct regular audits of completed sliding fee applications and eligibility determination forms to ensure compliance with policies. Errors will be tracked and addressed through corrective action and coaching.
El Proyecto del Barrio, Inc. remains committed to accurate, compliant, and equitable implementation of the Sliding Fee Program.
Person Responsible: Ricardo Ornelas
Position of Responsible Party: Chief Financial Officer
Completion Date: August 31, 2025